Darren Morgan, ONS head of GDP, said: “GDP growth for the first three months of 2017 remained unrevised at 0.2%.

“Growth was driven by business services and construction, partially offset by declines in some consumer-focused industries, such as retail sales and accommodation.

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“The saving ratio has fallen again this quarter to a new record low, partly as a result of higher tax payments, reducing disposable income.

“Some of the fall could be as a result of the timing of those payments, but the underlying trend is for a continued fall in the saving ratio.”

Inflation hit its highest level in nearly four years at 2.9% in May, with the Bank of England expecting the cost of living to peak at 3% by the autumn.

The Bank’s Governor Mark Carney stressed the Monetary Policy Committee’s tolerance was limited when it came to inflation sitting above the Bank’s 2% target. He also hinted on Wednesday that interest rates could rise from record lows of 0.25% if wages firm and the economy is boosted by stronger business investment.